I used the constant perpetual growth model for the first question and got $21.2 and used the Two-Stage growth model for the 2nd and got $137.05. Great Video. Thank you!
@morayophilips6200 Жыл бұрын
You've done a good job! Used this...to answer a question on DVM for stock valuation in my coursework. Thank you.
@financekid3163 Жыл бұрын
Thanks for watching!
@1barut5 жыл бұрын
1) Formula: Constant Perpetual Growth | Answer: 21.2 2) Formula: Two Stage Dividend Growth Model | Answer: 137.06
@lachlangmbh89473 жыл бұрын
Wrong. its 19.7 and 114.65
@craig11313 жыл бұрын
@@lachlangmbh8947 no it’s not, the first one is 2(1+0.06)/(0.16-0.06) which equals 2(1.06)/(0.1)= 21.2 Cba to check 2nd but I’ll assume he’s got it right aswell
@bajajholdings8433 жыл бұрын
Great Channel "FinanceKid" your videos are very helpful in educating people who are new to finance, thank you
@valueray Жыл бұрын
what if g > k? which formula to use then to calc margin of safety?
@gregaaron5 жыл бұрын
Great video, very helpful for my masters in finance course. Thank you.
@aartidev86973 жыл бұрын
What do we do if dividends for year 3,4,5 are provided but not the first two???
@chareenie15 жыл бұрын
Bonus Question Answer for 1. 21.2 used Constant Perpetual Growth Question 2 Non Constant Growth Model Answer 137.15
@VarietyG4MER2 жыл бұрын
I’ve been taught this over and over again and was never able to understand it. You finally helped me get this concept and i feel so grateful. Thank u so much!!!
@thezone83485 жыл бұрын
What is the difference between discount rate,market rate and coupon rate?
@shivraj80362 жыл бұрын
In bonus question no. 2 For the first 3 years the dividend growth is more than the discount rate How can this be possible?
@brodyb76022 жыл бұрын
What if it's something like this: You expect the company to begin paying a $2.6 per share dividend in 15 years, and you expect dividends to grow perpetually at 3.6 percent per year thereafter. If the discount rate is 13 percent, how much is the stock currently worth?
@celestinechike30482 жыл бұрын
Are you taking a course on coursera?
@yejin53154 жыл бұрын
Thank you so much for the video. It really helps. Its so diffifult to read the text book.
@akunacc51863 жыл бұрын
I'm confused to calculate the firm value. the formula is the derivative of PV (present value) or by the formula V = E + D or V = NOPAT/r? what's the difference between the formula?
@AbdulQadir-gf5nv2 жыл бұрын
Thank you so much for excellent explanation 👍🏼
@zazikswan82042 жыл бұрын
What if you get an exam question with different K variables? How would you go about solving that? You know the Dividend1 just paid at 0.51, and you have a constant growth rate at 5% but 3 different K at 14% first 3 years, 12% next 3 years and 10% indefinitely after, what is the fair price of the share? Do you have a video converting something like this :D
@ntwarishami2 жыл бұрын
Thank you
@alexturner24104 жыл бұрын
so required return is the same as discount rate?
@shireenrosario30754 жыл бұрын
Very well illustrated and to the point !! Thanks !!
@knowledgesharing45744 жыл бұрын
If a Company pays stock dividends, how to calculate the value of a stock?
@rohanagnelo70744 жыл бұрын
What about the taking into account the final cash flow when selling the stock ?
@grantstanish5513 жыл бұрын
DDMs assume the investor holds and get the cash flows into perpetuity. If you wanted to estimate cash flow with a sale, you would have to find the date of the sale, the PV of the dividends up to that point, the sale price (basically impossible to assume) and the PV of the cash flow
@michaelbelmasov85713 жыл бұрын
How do we know the discount rate?
@Oldman19122 жыл бұрын
Thank you so much for this.
@mritorto16 жыл бұрын
who provides you with the discount rate
@hardikbhandari41155 жыл бұрын
Superb Sir
@postmanpat29642 жыл бұрын
cheers boyo
@gloriaa6106 жыл бұрын
Thank you, it was very helpful
@memorykatsoka34613 жыл бұрын
So helpful
@nataliesabatella60075 жыл бұрын
beyond helpful! Thank you!
@fabeanlatouche70895 жыл бұрын
Very helpful...thanks alot
@bloodykratos6 жыл бұрын
which formula would you use to solve question 2
@officialhybrid80952 жыл бұрын
The long one [Two growth dividend model]
@trademyway91356 жыл бұрын
Well explained ..cheers man...
@vamshi85975 жыл бұрын
thank you so much
@FoodLiquorCool5 жыл бұрын
Thanks so much!
@howardmasekesa11725 жыл бұрын
i have 21.2 for the first one and 137.06 or the second one
@lilmoesk8996 жыл бұрын
Thanks man!
@user-fm5rr2xe4t2 жыл бұрын
👏🏻👏🏻👏🏻
@ahmedjamaissa90955 жыл бұрын
As for the second question growth is more than discount rate the it will give a negative value hence the question in its entirity is wrong..
@soughtafter64554 жыл бұрын
he said in the video that it doesn't matter if g1 is greater than the discount rate. what matters is that g2 has to be less than the discount rate. so the question is okay!😊
@victorquintero215 жыл бұрын
$20 for 1 and 75.76 for 2. (I am unsure about 2. Can someone check and let me know?)
@rishirishavverma61675 жыл бұрын
I am getting 21.2 and 137.02
@Tshem175 жыл бұрын
I also got 21.2 for number 1 but 35.79 for number 2
@georgephilip19663 жыл бұрын
@@rishirishavverma6167 In the final question, Why ( $52.5)/1.1^3 and not ^4 ?
@UkraineYamaha5 жыл бұрын
I have 21,2 for first and ~ 148 for 2.
@thezone83485 жыл бұрын
I got 137.06
@chiajoyce60713 жыл бұрын
Question 1 =$21.20 and Question 2 =$93.65
@AbdulQadir-gf5nv2 жыл бұрын
BQ # 1 [$21.2] and BQ # 2 [$137.05]
@adriab57963 жыл бұрын
1) Formula: Constant Perpetual Growth | Answer: 21.2 2) Formula: Two Stage Dividend Growth Model | Answer: 162.22
@adriab57963 жыл бұрын
re-did the second one, 2) Formula: Two Stage Dividend Growth Model | Answer: 137.06